Berkshire Hathaway, the conglomerate led by renowned investor Warren Buffett, is inching closer to a market valuation of $1 trillion. The company’s shares surged nearly 2% to $429 on Monday morning, pushing its market cap to $905 billion. This puts Berkshire Hathaway in an elite group of companies that have achieved the $1 trillion milestone, including tech giants Amazon, Apple, and Microsoft.
The Omaha-based conglomerate reported record-breaking numbers in its fourth-quarter earnings. It revealed a cash hoard of about $167.6 billion, surpassing the previous quarter’s high of $157.2 billion. Additionally, operating earnings for the year reached $37.3 billion, surpassing the previous record of $30.8 billion set in 2022.
Despite these impressive figures, Warren Buffett cautioned investors in his annual letter that the days of skyrocketing performances may be behind them. He emphasized that Berkshire Hathaway’s focus is on longevity and constancy rather than chasing extraordinary returns. Buffett stated, “Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital. Anything beyond ‘slightly better,’ though, is wishful thinking.”
Buffett also highlighted the lack of investment opportunities for Berkshire Hathaway, particularly outside the United States. He noted that there are no significant options for capital deployment internationally. However, the company recently increased its investment in five major Japanese companies: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These companies operate in various industries such as textile production, mining, electricity, and automotive manufacturing. Buffett sees this investment as a potential avenue for future partnerships around the world.
Nevertheless, due to Berkshire Hathaway’s size, building a substantial position in these companies will be a long-term endeavor that requires patience. Buffett compared the process to turning a battleship, emphasizing the need for a gradual approach.
As Berkshire Hathaway approaches the $1 trillion market valuation, investors will be closely watching how the conglomerate navigates the challenges of finding new investment opportunities while maintaining its reputation for steady and reliable performance. With Warren Buffett at the helm, Berkshire Hathaway continues to be a force to be reckoned with in the financial world.